My great-aunt Tedie believed that if someone gave you a gift, no matter how big or small, you were obliged to accept it. But what to do when you are given an ultrawow gift that suddenly diminishes the small token you had planned to present? And in these economic times, what is acceptable and what is garish when it comes to exchanging holiday presents?

"I take gift giving seriously, and I like it when it is thoughtful," says Marjorie Gubelmann, founder of the Vie Luxe home-fragrance brand. "It says how you feel about a person." But you don't have to spend your affection. Gubelmann swears by iomoi.com, a site that sells bright, graphic Lucite trays, glass coasters, and other accoutrements--many of which can be personalized. "And they are not a bazillion dollars!"

A clever and carefully chosen gift will save you any awkwardness if, for example, you are presented with an Hermès cashmere blanket. The giver will surely be delighted if you've wrapped up a favorite book you think she will love and pinned a specially selected vintage brooch to the ribbon.

One rule of thumb: Choose things you often are tempted to buy for yourself but don't because they aren't necessities. Gifts should be fun, even frivolous.

As for your best friends, if you have the means, why not be generous? Surprise one with the Céline bag or Verdura cuff she's been pining for but could never afford. Give to make someone happy; economics shouldn't be part of the equation.

Then again, my own favorite gifts from friends and colleagues haven't been pricey but fit my personality--like the popcorn popper from an editor who saw me constantly snacking on popcorn. (It's still being used for movie nights at home 15 years later.)

"The worst gift for me is a generic one," says British designer Alice Temperley. Elaine Mack, head personal shopper at Bergdorf Goodman, suggests John Derian decoupage plates for the friend who loves hosting parties or an iPhone case in an exotic skin for the global traveler. Surprise your accessories-obsessed friend with a piece of jewelry like Tory Burch's starburst necklace. For those who vacation by the sea, social fixture Lauren duPont favors nautically themed Nathalie Lété plates from Anthropologie. "And they are only $24!" she says.

Something handmade will always be happily received. "There is nothing more lovely," says interior designer Celerie Kemble. "My sister delivered containers of homemade pesto last year to everyone for Christmas. Event planner Bronson van Wyck sent beautiful bottles of his Caesar salad dressing with the recipe. Both were creative, tasty, and memorable." One year, Eleanor Ylvisaker sent out CD mixes of her favorite music, while the lucky ones on Tatiana Sorokko's list look forward to jars of her famous pickled tomatoes. And what about a promise note to spend a day having lunch and going to galleries with a friend you rarely see?

Only one area is definitely off-limits: regifting. Do not recycle gifts you don't want and try to pass them off as if they were new. The one exception is passing the item along--with full disclosure--to a close friend or family member who will appreciate it.

A gift within a gift is always welcome. I wouldn't mind two tickets to Mexico in my stocking and a chic travel bag packed with a resort-ready bikini and sandals under the tree. Hint, hint!